MANILA, Philippines - The disputed Reed Bank in the Spratly Islands is estimated to contain up to 5.4 billion barrels of oil and 55.1 trillion cubic feet (tcf) of natural gas, according to a newly published report by the United States Energy Information Administration (EIA).
Quoting data from the US Geological Survey, the EIA estimates the disputed Spratly Islands territory may contain significant deposits of undiscovered hydrocarbons.
“USGS assessments estimate anywhere between 0.8 and 5.4 (mean 2.5) billion barrels of oil and between 7.6 and 55.1 (mean 25.5) tcf of natural gas in undiscovered resources,” the EIA said in the Feb. 7 report.
“Evidence suggests that most of these resources are likely located in the contested Reed Bank at the northeast end of the Spratlys, which is claimed by China, Taiwan, and Vietnam,” the EIA also said.
In all, the EIA estimates the South China Sea to contain approximately 11 billion barrels of oil and 190 tcf of natural gas in proved and probable reserves.
The EIA said Asia could tap the South China Sea for additional sources of energy to meet domestic demand on the back of a growing economy in the region.
“The South China Sea offers the potential for significant natural gas discoveries, creating an incentive to secure larger parts of the area for domestic production,” the EIA said.
The EIA projects total liquid fuels consumption in Asian countries outside the Organization for Economic Cooperation and Development (OECD) to rise at an annual growth rate of 2.6 percent, growing from around 20 percent of world consumption in 2008 to over 30 percent of world consumption by 2035.
With Southeast Asian domestic oil production projected to stay flat or decline the region’s countries will look to new sources of energy to meet domestic demand,” the EIA said.
However, development in the controversial Reed Bank has been delayed because of the territorial dispute between China and the Philippines.
Forum Energy, a company led by top businessman Manuel V. Pangilinan, has asked the Department of Energy to extend its work program timetable for the $75 million oil and gas exploration project.
Forum Energy has been given a two-year extension for the second sub-phase of the project.
“The deadline of completion of the second sub-phase, comprising the drilling of two appraisal wells, has now been extended by two years to Aug. 14, 2015,” Forum Energy earlier said. The original deadline was Aug. 14, 2013.
Forum sought an extension in the government-mandated work program because of delays in their drilling activities, dragged largely by the geopolitical issues between the Philippines and China.
Recto Bank, also known as Reed Bank is located in the West Philippine Sea, the disputed area, which is currently the subject of an arbitration case filed by the Philippines before the United Nations Arbitral Tribunal.
The Department of Energy awarded Service Contract 72 in 2012 to the private consortium led by Forum Energy as part of government efforts to assert the country’s sovereign rights over the South China Sea now called the West Philippine Sea.